I have searched the forums and youtube for a way to install downloaded ringtones to specific contacts. The droid 3 manual gives alert tone changes, but not specific contacts. Is a software update needed for this or is a app available?
View the contact and then go menu > options. There may be another way, but I'm not sure.
-you may need to put the audio files in a folder called ringtones on your sd card. Actually, I'm not sure if this is true.
-you may need to run a media scanner so that android is aware of the new ringtones. I like Rescan Media, free from market.
-sound files must be in format that android can play. I know that some versions of Gingerbread may have issues with wave files.